Music exec: "Music 1.0 is dead."
By Nate Anderson
February 26, 2008 - 11:59PM CT

Five hundred top members of the music business gathered today in New York to hear that "music 1.0 is dead." Ted Cohen, a former EMI exec who used the phrase, opened the Digital Music Forum East by pleading with the industry to be wildly creative with new business models but not to "be desperate" during this transitional period. But what is music transitioning to? No one seemed quite sure, except to say that it won't look much like the music business of the last several decades.

Consider the statements that were made today without controversy:

* DRM on purchased music is dead
* A utility pricing model or flat-rate fee for music might be the way to go
* Ad-supported streaming music sites like iMeem are legitimate players
* Indie music accounts for upwards of 30 percent of music sales
* Napster isn't losing $70 million per quarter (and is breaking even)
* The music business is a bastion of creativity and experimentation

Only a few years ago, none of those statements would have been true, but perhaps none is more striking than the last. Panelists from every sector of the digital media marketplace were in agreement that the major labels, under the pressure of eroding profits, has been forced to become experimental in their business dealings and to do deals that would have been deemed too risky only months before.

Just within the last year, we've seen an array of experiments that include ad-supported streaming, "album cards" from labels like Sony BMG, and allowing Amazon to offer MP3s from all four majors. Some labels even allow user-generated content to make use of their music in return for a revenue share from sites like YouTube—unthinkable a few years ago to a business wedded to control over its music and marketing.

Ars Technica
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